Grab sees Singapore digital banking licence as key to fintech ambitions

Grab Financial head Reuben Lai.

SoftBank Group-backed unicorn Grab will submit an application for a digital banking license in Singapore, the company has confirmed, as it sees the financial businesses as a driver for future growth.

If Grab successfully obtains the license, consumers as well as small and medium-sized businesses would have access to deposit, lending and other financial services — a major step toward becoming the leading tech company position in Southeast Asia.

In an interview with the Nikkei Asian Review Saturday, Reuben Lai, head of Grab Financial Group, the company’s financial unit, said: “We will be applying for the digital banking license in Singapore” before the December 31 submission deadline.

“The banking license unlocks more opportunities for us to roll out more services to serve our customers,” Lai said. “Grab Financial Group is a major pillar of growth for Grab, and for us to be able to get a banking license will cement our position as the largest fintech ecosystem in Southeast Asia.”

Singapore’s central bank will issue up to five digital banking licenses — two full bank licenses and three wholesale bank licenses — to advance the banking sector liberalization. Grab will apply for the full bank license that will allow the licensee to offer services to both retail and non-retail customers, Lai said.

Grab had expressed interest in the license when Singapore announced the liberalization in June, but it had not clearly said whether or not it would actually apply. According to Lai, Grab will apply with a partner which “has a huge ecosystem consisting of both consumers and micro merchants.”

“What we want to do with the banking license is to bring more transparency, more accessibility to the users,” Lai said. “It’s about how we allow the users in Singapore to experience banking in a way that is very seamless, very easy to use, and they don’t need to worry about hidden fees.” He did not provide details of the plan such as the interest rate on deposits.

With dozens of parties being interested in the new licenses, Grab will compete with other fintech startups and established companies, where sustainable business model and value propositions are among selection criteria. Lai said he is confident to be chosen: “I think we are believed to be front-runners in this.”

Founded in 2012, Grab has diversified its businesses from ride-hailing to food delivery to financial services. It currently offers financial services in Singapore, Indonesia, Malaysia, Thailand, the Philippines and Vietnam.

Being the region’s most advanced economy, Singapore’s banking market is seen already saturated by existing players. But Lai stressed there are still “pockets of unmet needs,” citing small and middle-sized businesses and “gig economy workers” — such as ride-hailing drivers and food-delivery staff — who typically work for platforms like Grab.

Lai said Grab would look into opportunities in banking in other Southeast Asian countries if they follow Singapore to allow non-banks to become virtual banks. “It’s not surprising that there’s interest in the regulators around the region… If the opportunity arises, we would love to participate.”

The Monetary Authority of Singapore is expected to announce the licensees in mid 2020.

Regardless of the results of the banking license application, Grab will launch wealth management services that would let users and partner merchants make small investments by using the balance on their Grab account. This will be launched in the first half of next year, starting in Singapore, he said.

Grab counts SoftBank, Toyota Motor, Uber Technologies and Microsoft as key shareholders. It is valued at $14.3 billion, according to CB Insights, being the largest unlisted startup in Singapore.

This article was first published on Nikkei Asian Review

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.